Living at Lake Chapala in Mexico

There are significant cultural differences between North Americans and Mexicans. Doubt that statement? Real estate situations will create examples faster than you can analyze them.

For Sale
It begins when the sign goes up on a property. John calls to ask "How many bedrooms and baths are in that house? How's the kitchen? If he even thinks to ask about the lot, he will ask if there is a "nice yard."

When John's Mexican counterpart Juan calls about the same sign, his first, and often only question is, "How many meters of land are in the property." He may never ask any questions about the house. When he does ask about the house, it will be only to inquire about the size—the number of meters of construction.

Finding Properties for Sale by Owner
Newcomers are even more frustrated when they try to find fixer-upper properties and lots in Lakeside villages. It's then they realize that most Mexican property owners don't deal with strangers, have little experience with real estate companies, don't want to pay a sales agent's commission, and often won't share information they may have about neighborhood houses for sale.

A gringo viewing property asks, "How much is that lot?" When told that piece of land is Mexican owned and not on the market, our gringo buddy winks and nudges us and says, "Well, we both know everything is for sale, it's always just a matter of money." It's as hard to get him to understand that many Mexican houses or lots will never be for sale, for any amount of money, as it is to talk a Mexican into selling land they want to hold.

Buying Mexican Owned Property
North of the border, couples purchase a starter home. Once they establish equity, they sell it and buy a larger house. In Mexico's cash market, young couples can seldom afford to buy a house. If they can buy a second house, they keep and rent the first.

Mexicans in small villages don't sell their houses unless they must. Even when in severe financial trouble, families keep properties as long as possible. For many years, Mexicans have had little faith in their own currency and choose to buy land, the most stable of investments, instead of putting money into bank accounts. Their view of property ownership is more like that of the Native Americans. They don't believe in owning land; they are only allowed to hold it in sacred trust for the next generation.

Mexican extended families still live in very small geographical areas within their villages. Originally the people in Lakeside towns had tiny farms—really small acreages—near the center of town. The towns have grown to surround the little farms, which were sometimes only one or two city blocks. As time passed, family members built houses around the edges of the property.

Today some north shore heirs to these homes have sold their properties, giving foreigners and other Mexicans opportunities to purchase and remodel houses on "normal" size lots in town. In many of the south shore villages, families still own most of their property. The villages are made up of larger lots and there are more farm crops and livestock right in the center of the villages, and fewer remodeled homes for sale.

Private Sale Closings
A North American buyer expects his good faith money—that initial payment will be held in an escrow account, or at least by a third party. A Mexican seller plans to have that 10% in his hand, on the day it's received. He may need it to pay off family members who own a small portion of the property or to pay off liens he's incurred.

When you get in to the world of buying property privately from a Mexican national, it's not unusual to discover that the person you are dealing with does not have a deed for the property in his name. He may have claim to a major portion of the property, or he may represent a large group of family members.

Remember those acreages we were talking about? All too often when he grandparents died, they left the property in equal parts to their six or eight children. Some of those heirs have often died, and left their portion to their three or four children. Unfortunately even some of that third generation of heir's portions may have passed to their children.

Your contact may need to round up from 30 to 75 or 80 valid partial owners to agree to sign in front of the notary before the property can close, free and clear. If just one heir refuses to sign the paperwork, your deal is over, and your contact may no longer have your good faith money to return to you.

If you think that sounds like a nightmare, you are exactly right. We are nervous during the escrow period. Anxious that it all fall into place and that all the Ts are crossed and Is are dotted.

Remember that sales between Mexicans are different, often face to face deals between relatives or neighbors. The seller and buyer meet at the notary's office, where the good faith payment is turned over to the seller and a contract to sell is signed and witnessed. The remainder of the money (often in cash) changes hands often months later, when the notary has all the paperwork in order and the new deed has been prepared—sometimes years later.

You can avoid these closing nightmares and most of the other cultural barriers by using an honorable real estate company and agent to broker your deal. They won't allow you to get involved in purchasing a property without a current, registered deed.

Here's probably the most important cultural difference—save looking for "For Sale by Owner" homes for when you are North of the border.

Labels: buying real estate, Lake Chapala Real Estate

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Judy King is publisher of  Mexico Insights' Living at Lake Chapala, a monthly online magazine for people interested in Mexico's Lake Chapala region, in the state of Jalisco.

Judy, a 16-year resident of Ajijic on Lake Chapala's north shore, conducts weekly newcomer's seminars, shares her expertise about Mexico in her monthly online magazine, and in the "Mexico Lindo" column for the Lake Chapala Review.

Judy also is a speaker for local organizations and visiting tour groups about the Lakeside area and Mexican customs and holidays.